I'll analyse both companies' H1 results and track their progress through to their latest updates.
Comparing H1 FY2026 Results (April-Sept 2025)
Both companies report their H1 results covering overlapping timeframes, so we have truly comparable periods:
- Singtel H1 FY2026: April-September 2025 (with Q1 update starting January)
- StarHub 1H 2025: January-June 2025 (with 3Q update through September)
This allows for much more meaningful comparison.
Financial Performance Comparison
Revenue & Profitability
| Singtel H1 FY26 | StarHub 1H/9M 2025 | |
|---|---|---|
| Revenue | S$6.91bn (-1.2% YoY) | S$1.45bn service revenue (+0.4% YoY for 9M) |
| Operating Profit (EBIT/EBITDA) | OpCo EBIT +12.5% YoY | EBITDA -8.6% YoY (9M) |
| Net Profit | S$1.35bn underlying (+14%) | S$88.2mn excluding one-offs (-25% for 9M) |
| Margin Trend | EBITDA margin stable/improving | Service EBITDA margin compressed 2.0% pts |
Key Observation: Singtel is growing profitability whilst StarHub is sacrificing margins for market share defence.
Progress Tracking: H1 → Latest Updates
StarHub's Journey (1H → 3Q 2025)
What Changed:
-
Revenue Momentum Lost
- 1H2025: Service revenue +3.0% YoY
- 9M2025: Service revenue +0.4% YoY
- 3Q2025 alone: -4.7% YoY ← significant deceleration
-
Profitability Deterioration Accelerated
- 1H2025 EBITDA: -9.1% YoY
- 9M2025 EBITDA: -8.6% YoY
- 3Q2025 EBITDA: -7.6% YoY (slightly better but still declining)
- Service EBITDA margins: compressed from 22.2% (9M 2024) to 20.2% (9M 2025)
-
Mobile Business Under Severe Pressure
- 1H2025: Mobile revenue -5.4% YoY
- 9M2025: Mobile revenue -6.9% YoY
- 3Q2025 alone: -10.1% YoY ← accelerating decline
- ARPU collapsed from $23 (3Q2024) to $22 (3Q2025), with 2Q at $20 showing volatility
-
Enterprise: Timing-Dependent Lumpiness
- 1H2025: Regional Enterprise +6.8%, Managed Services +12.8%
- 3Q2025: Regional Enterprise -7.8%, Managed Services -11.8%
- This reveals project-based revenue volatility – strong quarters followed by weak ones
- 9M2025 still positive (+1.5% Regional, +3.2% Managed Services) but momentum clearly uneven
-
Strategic Response: Aggressive Stance Intensifying
- Management now using language like "dialling up aggression" and "defend/grow market share"
- MyRepublic acquisition completed and integration underway
- Launched 5G Unlimited+ plans, Eight 5G launch, new Mediacorp partnership
- Cost savings programme expanded: targeting ~$60M over FY2026-2028
Critical Insight: StarHub's 3Q results show their competitive defence strategy is costly – they're winning subscribers (mobile up to 2,187K) but revenues and margins are both falling. The market share battle is intensifying.
Singtel's Journey (Q1 → H1 FY26)
What Changed:
-
Sustained Growth Momentum
- Q1 FY26: Underlying profit +14%
- H1 FY26: Underlying profit +14% (consistent)
- In constant currency: +17% (Q1) vs +17% (H1) – remarkably stable
-
Optus Recovery Continues
- Q1: Operating profit +36%
- H1: EBIT +27% (still very strong, slight moderation from Q1's exceptional performance)
- Revenue growth maintained at +2%
-
Regional Associates Delivering
- Q1: Post-tax contributions +15%
- H1: Post-tax contributions +12% (excluding Intouch: +21%)
- Airtel remains star performer: contributions more than doubled in Q1, continued strong in H1
-
NCS Powering Through
- Q1: EBIT +22%
- H1: EBIT +41% (accelerating!) or +29% excluding one-off credit
- Order book at S$1.8bn with healthy 1.2x book-to-bill ratio
-
Critical Incident: September Outage
- New risk emerged: Optus experienced a "serious outage that impacted emergency services" in September 2025
- CEO Yuen acknowledges need to "step up efforts to improve Optus' operational capabilities"
- This follows the 2022 cyber attack – reputational and regulatory risks mounting
-
Upgraded Guidance
- Originally: "high single-digit" OpCo EBIT growth
- Revised (November): "high single digits to low double digits"
- But note the caveat: "taking into consideration... uncertainties in Australia as a result of the outage"
-
Capital Recycling Accelerating
- Generated S$5.6bn in proceeds since Singtel28 plan started
- Another S$1.5bn from 0.8% Airtel stake sale (November)
- Achieved over 50% of S$9bn mid-term target
- Dividend increased 17%: 8.2 cents (H1 FY26) vs 7.0 cents (H1 FY25)
Critical Insight: Singtel's portfolio strategy is working – regional diversity and associate contributions are offsetting Singapore market weakness and now Australian operational challenges. However, the Optus outage introduces execution risk.
Side-by-Side Strategic Comparison
| StarHub | Singtel | |
|---|---|---|
| Market Position | Domestic #2 mobile, #1 broadband | Regional leader with scale |
| Competitive Stance | Aggressive defence, accepting margin compression | Selective, maintaining profitability |
| Growth Drivers | Enterprise/Cybersecurity (lumpy), cost optimisation | Associates (Airtel, AIS), NCS, data centres |
| Key Risks | Consumer pricing war, project timing, concentration | Optus operational issues, currency, regulatory |
| Capital Strategy | Returning cash via dividends (6.0¢ guidance) | Active recycling + dividend growth (+17%) |
| Transformation Status | "Harvest" phase post-DARE+, identifying $60M costs | Scaling growth engines (Nxera, NCS) |
Progress Assessment
StarHub: Deteriorating Trends
Positives:
- Cybersecurity remains strong (+17% in 9M2025)
- Cost optimisation roadmap identified with concrete targets
- Successfully defending #2 mobile position (subscribers up)
- MyRepublic acquisition completed
Negatives:
- Revenue growth stalled (9M +0.4% vs 1H +3.0%)
- Profitability declining faster than expected
- Mobile business accelerating downwards (-10.1% in 3Q)
- Enterprise revenue highly volatile and project-dependent
- Strategic aggression means margins will stay compressed
- Free cash flow deeply negative even excluding spectrum (-16.4% in 9M)
Trajectory: Downward spiral – fighting hard but losing ground economically.
Singtel: Stable to Improving
Positives:
- Consistent double-digit profit growth
- Multiple growth engines firing (Optus, NCS, Airtel)
- Upgraded guidance reflects confidence
- Strong capital recycling execution
- Dividend growth returned (17% increase)
- Data centre business (Nxera) positioned for AI boom
Negatives:
- Optus operational challenges mounting (outage after cyber attack)
- Singapore consumer market still weak (-10% mobile revenue)
- Telkomsel underperforming
- Guidance caveat about "uncertainties in Australia" concerning
- Currency headwinds mask underlying performance
Trajectory: Generally positive but with execution risks in Australia.
Detailed Risk Analysis
StarHub's Mounting Pressures
1. The Margin Death Spiral Management is caught in a classic competitive trap:
- To defend market share → must match competitors' aggressive pricing
- Lower prices → compress margins (down 2.0 percentage points)
- Lower margins → need cost cuts to maintain profitability
- Cost cuts take 2-3 years to materialise fully
- Meanwhile, competitors keep fighting
Why This Matters: StarHub's EBITDA guidance downgrade (to 88-92% of prior year) means they're accepting 8-12% profit decline in FY2025. For a mature telco, this is severe.
2. Consumer Economics Not Sustainable Look at the mobile market evolution they showed:
- 2019: $20/month for 20GB, no roaming
- 2024: $12/month for 200GB, 10GB roaming + roam-like-home
- Mid-2025: Players offering $8-10/month with 50-400GB + roaming
That's a 40-60% price decline over 5 years whilst data costs are rising. The chart shows "3rd player losing share" – this consolidation pressure will continue.
3. Enterprise Lumpiness Masks Underlying Challenges
- Managed Services swung from +12.8% (1H) to -11.8% (3Q)
- Management keeps emphasising "project completions" and "timing of project recognition"
- This suggests they're booking large, one-off projects rather than recurring revenue
- Recurring revenue would be far more valuable but harder to win
4. Free Cash Flow Deeply Negative Even excluding the S$188M spectrum payment:
- 9M2025 FCF: S$140M (down 16% from S$167M in 9M2024)
- With spectrum: -S$48M (massively negative)
- This limits flexibility for investments, acquisitions, or dividend increases
Singtel's Australian Exposure
1. Optus: From Strength to Uncertainty The September 2025 outage is extremely serious:
- Emergency services (Triple Zero) were impacted
- Coming only 3 years after the 2022 cyber attack
- CEO's language shifted: "step up efforts to improve operational capabilities"
- Regulatory investigations ongoing
Why This Matters:
- Optus contributed ~24% of group revenue (A$3.4bn per half)
- EBIT growth of 27% has been a key profit driver
- Any regulatory penalties, mandatory infrastructure upgrades, or customer churn will materially impact group results
- The upgraded guidance includes a major hedge: "uncertainties in Australia"
2. Currency Volatility Singtel's real performance is masked by currency:
- Reported OpCo EBIT: +12.5%
- Constant currency: +14.3%
- Australian dollar fell 7% in prior period
Implication: If AUD strengthens, reported results will look even better. But if it weakens further (possible given China economic concerns), the reverse occurs.
3. Associate Dividend Dependency Singtel expects S$1.1bn in associate dividends (up from S$1.0bn). But:
- Airtel's performance is stellar now – can it continue?
- Telkomsel is struggling (profit down in Q1)
- Globe facing "weak consumer spending"
If any major associate cuts dividends, Singtel's cash generation suffers immediately.
Sector Themes: What's Happening to Singapore Telcos?
The Structural Challenge:
-
Mobile Market Maturation
- Penetration >150% (everyone has multiple SIMs)
- Growth must come from ARPU, but competition drives it down
- Data usage growing 12-22% YoY but not translating to revenue
-
The Economics of Unlimited
- StarHub launched "5G Unlimited+" plans
- Competitors offering 188-400GB/month
- When data becomes unlimited, how do you charge more?
-
Equipment Subsidies Returning
- "Free month promos" becoming standard
- Higher acquisition costs eating into profitability
-
Enterprise as Escape Route
- Both companies pivoting to enterprise (StarHub), regional (Singtel)
- But enterprise sales are lumpy and lower margin than consumer
- Need scale to make it work
Investment Thesis: Quality vs Value
The Quality Play: Singtel
Why Singtel is the "Safer" Choice:
-
Diversification Working
- When Singapore weak, Optus and associates compensate
- When one associate struggles (Telkomsel), others (Airtel) deliver
- Geographic spread across high-growth markets (India, Thailand)
-
Optus Turnaround Real
- Despite outage concerns, fundamentally improving
- Mobile ARPU growing from price increases
- 900MHz spectrum starting to pay off
-
Capital Allocation Discipline
- S$5.6bn recycled already (>50% of target)
- Funding growth (data centres, NCS) while increasing dividends
- Dividend up 17% to 8.2 cents
-
Growth Engines Visible
- Nxera data centres: ">20% CAGR" over next 4 years
- NCS: 41% EBIT growth with S$1.8bn order book
- These will materially change business mix
The Catches:
- Optus operational risk is real and rising
- Singapore business still declining (-10% mobile service revenue)
- Execution must improve or guidance credibility suffers
- Trading at premium valuation to reflect quality
The Value Trap: StarHub
Why StarHub Looks Cheap (But Is It?):
-
Dividend Yield Attractive
- 6.0 cents guidance = ~4.5-5.0% yield (depending on price)
- Maintained despite profit pressures
- Dividend policy: 80% of adjusted profit
-
Market Leader in Broadband
- #1 position with 568K subscribers
- MyRepublic acquisition consolidates further
- Churn very low (1.0%)
-
Cost Programme Potential
- S$60M targeted over FY26-28
- DARE+ transformation complete, now harvesting
- Legacy decommissioning, automation could unlock value
-
Enterprise Orderbook Growing
- +5.7% YoY (9M2025)
- Cybersecurity demand structural
- Regional expansion potential
Why It Might Be a Trap:
- Falling profits: -25% NPAT (9M, excluding one-offs)
- Margin compression continuing: 20.2% vs 22.2% prior year
- Mobile business collapsing: -10% in 3Q alone
- Enterprise lumpy: -11.8% managed services in 3Q after +12.8% in 1H
- FCF negative: Can they maintain dividends?
- Consumer war intensifying: Management "dialling up aggression" = more margin pain ahead
Investor Recommendations
Singtel: BUY for Quality Growth with Monitored Risk
Singtel represents the higher-quality investment for investors seeking exposure to Asian telecommunications growth, supported by a well-executed portfolio strategy that has delivered consistent double-digit profit growth (+14% underlying) and an upgraded guidance range to "high single to low double digits" OpCo EBIT growth despite currency headwinds. The company's diversification across geographies (Australia, India, Thailand, Indonesia, Philippines) and assets (mobile, enterprise IT, data centres, associates) has proven its value, with stellar performances from Airtel (contributions more than doubled) and NCS (+41% EBIT) offsetting Singapore market weakness. Whilst the September 2025 Optus outage introduces operational and regulatory uncertainty that requires close monitoring, the company's strong balance sheet (S$3.4bn cash), active capital recycling (S$5.6bn generated, >50% of target), and 17% dividend increase demonstrate financial strength and management confidence. The positioning in high-growth areas—particularly Nxera data centres (">20% CAGR" guided) capitalising on AI demand, and NCS's S$1.8bn order book—should drive business mix improvement over the medium term. Investors should buy on dips caused by Optus concerns, as the underlying portfolio momentum and regional exposure offer superior risk-adjusted returns, though must remain vigilant regarding Australian regulatory developments and execution risks.
StarHub: AVOID – Value Trap with Deteriorating Fundamentals
StarHub presents as a classic value trap where an attractive 4.5-5.0% dividend yield and depressed valuation mask fundamentally deteriorating business economics that show no signs of stabilising despite management's aggressive defensive actions. The company's financial trajectory has worsened sequentially—service revenue growth decelerated from +3.0% (1H2025) to +0.4% (9M2025), with 3Q2025 alone down 4.7%, whilst EBITDA margins compressed 2.0 percentage points to 20.2% and underlying net profit fell 25%, leading management to guide FY2025 EBITDA at only 88-92% of prior year levels, representing an 8-12% profit decline. The mobile business, representing their second-largest segment, is accelerating downwards (-10.1% in 3Q2025 vs -5.4% in 1H2025) as industry pricing has collapsed ~40-60% over five years whilst data costs rise, forcing StarHub into a margin-destructive competitive response that management euphemistically describes as "dialling up aggression". Whilst the enterprise business shows promise (+17% cybersecurity growth), its extreme lumpiness (managed services swinging from +12.8% to -11.8% quarter-over-quarter) and project-based nature limit reliability, and the S$60M cost savings programme over FY26-28 is insufficient to offset revenue and margin pressures. Most critically, free cash flow turned deeply negative (-S$48M including spectrum in 9M2025, or +S$140M excluding spectrum but down 16%) raising serious questions about dividend sustainability despite management's commitment. Investors should avoid StarHub until clear evidence emerges of revenue stabilisation and margin recovery; the current dividend yield is unlikely to be maintained if business fundamentals continue deteriorating, making this a poor risk-reward proposition even for income-focused investors.
References:
- https://www.singtel.com/about-us/investor-relations
- https://ir.starhub.com/results.html
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